With recession fears fading, business owners are again feeling more hopeful, at least about their own prospects.
That’s one of the biggest takeaways from this week’s cover story on the results of PBN’s 2023 Summer Business Survey.
Optimism is in the DNA of most business owners. That’s reflected in consistently high levels of self-confidence through all types of economic challenges since PBN began conducting the biannual survey in 2008.
Last winter, however, that optimism dropped below 50% for the first time since the Great Recession. The modest summer bounce back to a slight majority is still well below survey highs above 80% in 2016, but it’s a welcome sign in a still-uncertain post-pandemic economy.
Businesses are, however, typically much less hopeful about the overall state economy. And expectations for improvement there over the next 12 months are at their lowest level since 2008.
That pessimism about the state economy may be fueled in part by a drop in year-over-year profits, to a 2½-year low.
There are some other warning signs in the survey data, such as growing concerns about rising business costs, including rents, and ongoing staffing challenges.
So, are business owners fooling themselves thinking they can buck the overall economy? Not necessarily, says Edward M. Mazze, a distinguished professor of business administration at the University of Rhode Island.
With inflation and recession fears declining, businesses should be optimistic, he says.
“People are spending money,” he said.